NADA: Used-vehicle values to peak in March

March 28, 2014

By Mark Scarpelli, Chicago Metro NADA Director

Extremely cold weather during the first two weeks of February and more moderate temperatures over the second half of the month correlated exactly with used price movement, according to the NADA Used Car Guide in the March edition of Guidelines, a monthly report on new- and used-vehicle sales trends and price movement.

"Used prices grew by 0.7 percent over the first half of the month, but more favorable weather over the second half of the month allowed prices to grow 2.2 percent by month’s end, which is in line with the NADA’s forecast of 2.1 percent," said Jonathan Banks, executive automotive analyst of NADA Used-Car Guide.

The NADA expects the seasonal uptick in used auto demand to continue for another month before dissipating in the second quarter of the year.

The dealer association’s forecast had prices rising by an additional 1 percent in March and then falling by an average range of 2.5 percent to 3 percent per month from April through June. Prices are forecast to be 0.5 percent to 1 percent lower than 2013 levels by the end of year.

In other NADA news ...

• The NADA encourages dealers around the country to meet with their senators and representatives during Congressional Dealership Days, April 14-25, to discuss ongoing concerns with the Consumer Financial Protection Bureau and other federal legislative and regulatory issues impacting franchised dealers.

New-car and -truck dealers are effectively positioned to build long-term grassroots relationships with members of Congress. During this election year, most representatives and senators would welcome the opportunity to visit dealerships in their districts and interact with those whose livelihoods depend on the continued success of franchised dealers.

If you are interested in hosting a Congress member and would like assistance with setting up a visit, contact Patrick Calpin, NADA director of grassroots advocacy, at pcalpin@nada.org or (202) 547-5500.

• Participation continues until April 30 in the NADA’s 2014 Dealership Workforce Study. A major challenge facing new-car and -truck dealers is attracting and keeping talented employees. There is no cost to participate.

Participating dealers will receive a complimentary copy of the study’s Basic Report, a custom report that compares the individual dealership’s compensation for 60 job positions, employee benefits programs, hours of operation, work schedules, and retention and turnover to the aggregated data of other participating dealerships, both regionally and nationally; and the 2014 Dealership Workforce Study Industry Report, which provides an overall industry-wide analysis of the aggregated DWS data, including hiring and retention trends, demographics such as generational differences and the gender gap, compensation, tenure, employee benefits statistics, plus hours of operation and work schedules for all U.S. regions, as well as an economic overview of 2013 and forecast for the future.

• The Federal Trade Commission on March 12 reached a $3.4 million settlement with a company for violations of the Do-Not-Call (DNC) restrictions under the FTC’s Telemarketing Sales Rule based on phone calls the company made to consumers on lists purchased from "lead generators" who had represented they had consent from the consumers for those calls. However, they did not have consent, and many of the phone numbers were on the national and company-specific DNC lists.

This is a valuable reminder that dealers — not the vendor — are likely to be held liable for any DNC or similar violations related to leads purchased from a third party vendor.

"Companies that use lead generators must exercise due diligence when they buy lists of phone numbers," said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, "or else they can be on the hook for illegal telemarketing."

Editor’s note: The NADA encourages dealers not only to conduct due diligence with all their vendors based on the services each vendor provides, but also to clarify compliance obligations via contract and ensure that the dealership is protected in the event that the vendor has misrepresented its compliance efforts.